GRI South Africa Opens New Wind Tower Mast Manufacturing Plant

Speech by Donald Grant, Minister of Transport and Public Works

• Honourable Minister of Trade and Industry, Mr Rob Davies
• Honourable Executive Mayor of the City of Cape Town, Alderman Patricia de Lille
• Spanish Ambassador to South Africa, Mr Juan Ignacio Sell Sanz
• IDC Divisional Executive for Agro and New Industries, Ms Khumo Morolo
• GRI Renewable Industries CEO, Mr Javier Imaz Rubalcaba
• Gestamp Wind CEO, Mr Dionisio Fernandez Auray
• GRI South Africa Plant Manager, Mr Christiaan Botha
• Colleagues
• Ladies and Gentlemen

It is indeed an honour for me to represent the Western Cape Government at today’s opening of GRI’s (Gestamp Renewable Industries) new Wind Tower Mast Manufacturing Plant here in Atlantis. This over R220 million investment from GRI was the first to be attracted through the City’s recently established Investment Incentive Scheme, and is testament to the City and the Province’s commitment, through effective partnerships, our 110% Green campaign, and GreenCape, to make the Western Cape the lowest carbon region and the green economy hub of South Africa. This investment is expected to result in 200 much-needed permanent jobs in the area, and firmly establish Atlantis as the heart of green manufacturing in the region.

The United Nations Environment Programme (UNEP) defines a green economy as one which is “low carbon, resource efficient and socially inclusive”. The Western Cape Government’s Green Economy Strategic Framework is designed to achieve just that, with a focus on driving business opportunity and investment into the green economy. With 60% of South Africa’s 64 REIPPPP (Renewable Energy Independent Power Producer Procurement Programme) projects having been developed by Western Cape based developers, we are well on our way to becoming the primary renewable energy centre in the country.

In the latest Climatescope 2014 report and index, compiled by Bloomberg New Energy Finance on behalf of American and British government and development agencies, South Africa was ranked 3rd (after China and Brazil) in a country-by-country assessment of 55 renewable energy markets in Africa, Asia, Latin America and the Caribbean. An article by Terence Creamer in Creamer Media’s Engineering News speaks of the study having found that South Africa accounted for almost 90% of investments in Sub-Saharan Africa, with nearly $10 billion (R120 billion) worth of clean energy investment in the last two years since the introduction of the REIPPPP in 2014 This is significantly up from the $0.6 billion (R8 billion) that had been invested in renewables prior to this. The study did, however, highlight South Africa’s poor performance on the ‘Enabling Framework Parameter’, which it attributes to low electricity prices and other market-limiting developments such as the fall in power demand in 2013.

The work that we do in the renewable energy sector in this province will continue to create the enabling environment that allows the sector to thrive, attract more investment to exceed the already R20 billion estimated to have been allocated to actual and planned investment in the sector, and produce more jobs. By developing an understanding of the green economy, the Western Cape Government’s ‘Special Purpose Vehicle’ to unlock the manufacturing and employment potential in the green economy, GreenCape, works closely with the industry to; eliminate barriers to growth; communicate barriers to government and relevant stakeholders; and provide ongoing information sharing and support. This interaction is, and will be, key to the future sustainability of our collective efforts to optimise on the renewable energy sector’s economic potential.

In support of growth in this sector, the Western Cape Department of Transport and Public Works has dedicated resources to enable the effective transportation of abnormal manufacturing loads, optimise transportation routes and delivery on site, and increase overall capacity.

In the Western Cape, there are many different wind farms (Koperfontein, Klipheuwel, Sere, Gouda, Knobelsfontein, and Paternoster) that are built with various types of wind turbines, with each turbine consisting of large components that require transportation with special vehicles. The Department of Transport and Public Works issues the necessary permits for these abnormal loads, taking into consideration limitations in terms or safety, as well as routes travelled.

During this financial year alone, the following wind turbine abnormal load components have been transported:

• Tower sections: 652
• Blades: 221
• Nacelles 111
• Hubs: 98

Moving Large Loads from Road to Rail

Transporting goods by road is becoming increasingly challenging, but there are ways to address some of the issues effectively and in a sustainable manner. The fast emerging renewable energy sector, with its transportation needs, is the impetus we need to really explore ways in which we can and must expand our freight rail operations, particularly in this region. I spent time at the Windaba conference at the CTICC on Monday where, on a session devoted to the logistics of setting up wind farms, I was fortunate to be exposed to the latest research and practical solutions to the challenges involved.

The proportion of commercial freight tonnage transported by road in South Africa has steadily increased over the last few years to approximately 89% today. This increase is mainly due to fluctuating and increasing needs of South Africa’ supply chains and a number of challenges faced by the National rail operator such as: low service levels, lack of flexibility and capital investment delays. This puts an enormous strain on the road infrastructure, much of which is already in a questionable state of repair, and results in increased traffic congestion, and higher vehicle and road maintenance costs, as well as some horrific road crashes. The impact of this is an increase in travel distances resulting in longer turnaround times reducing overall supply chain efficiency.

In this province, of the total surfaced road network of 6 485.80 km, 5775.73 km are classified as being in fair to very good condition (89%), while 91% of all vehicle kilometers travelled are on fair to very good roads. Over the past five years, the Western Cape Department of Transport and Public Works has also managed to reduce its road maintenance backlog by 16.2%, adding to the general overall improvement of the province’s surfaced roads network. This situation is, however, untenable, as any gains we may hope to make in the renewable energy sector will most likely be off-set against the escalating maintenance costs, as well as those associated with the transportation of manufactured goods.

Other transportation challenges include volatile fuel prices, toll costs, stricter carbon requirements, lack of policies, poor co-ordination among government departments and their agencies, and offloading turnaround times. The benefits of shifting freight from road to rail, especially for bulk transportation, are that carbon emissions are reduced exponentially, and costs are notably brought down. However, to achieve this, an inter-linked rail and port infrastructure (supported by road) is required. Integrated systems to enable cargo to move quickly and efficiently between road and rail will also be necessary.

There is clearly a lot more that still need to be done to for us to create the enabling environment necessary to allow for the renewable energy sector to unlock its full economic potential. The challenge will be how best we are able to work together in projects, like this one, across all spheres of government and together with the industry, to drive business opportunity and investment into the green economy. Our success will be the legacy that we leave behind for future generations. We dare not fail.

Thank you